Is Your Product Too Expensive?

Is Your ProductToo Expensive?What does too expensive mean?

By Mark Proffitt

MarkProffitt.comMarkProffitt.com

Too Expensive

● Absolute● Relative


Customers' Values

● Customers buy products to satisfy desires

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Customers' Values

● Customers buy products to satisfy desires


Customers' Values

● Desire A > Desire B > Desire C


Customers' Values

● Cost > Value = Too Expensive


Customers' Values

● Cost > Value = Too Expensive● Absolute Too Expensive


Outcomes

● Objective criteria● Observe● Measure


Outcomes

OK OKOKOK

Maximum

Minimum

A B C DMarkProffitt.comMarkProffitt.com

Outcomes

OKTooLow

TooHigh OK

Maximum

Minimum

A B C D

FAIL


Absolute Too Expensive

$

Cost > Value

OK TooLow

TooHigh OK

Maximum

Minimum

A B C D

FAIL

Outcomes ≠ Criteria


Relative Too Expensive

Product A$ 100

OK OK OK OK

Minimum

A B C D

Product B$70

OK OK OK OK

Minimum

A B C D


Relative Too Expensive

Product A$ 100

Product B$70


OK OK OK OK

Minimum

A B C D

OK OK OK OK

Minimum

A B C D

Cost is more than money

OK OK OK OK

A B C D

OK OK OK OK

A B C D

Minimum


Purpose Determines Criteria

OK OK OK OK

A B C D

TooLow

TooLow Too

LowTooLow

A B C D

Minimum


Purpose Determines Criteria

TooHigh Too

HighTooHigh

TooHigh

A B C D

OKOK OK OK

A B C D

Maximum


Leave fromdesired place

Leave atdesired time

Leave indesired

condition

Leave withdesiredobjects

Arrive atdesired place

Arrive atdesired time

Arrive indesired

condition

Arrive withdesiredobjects

Outcome for Travel




Leave indesired

condition




Arrive indesired

condition


Outcome for Travel




Leave indesired

condition




Arrive indesired

condition


Outcome for Travel




Leave indesired

condition




Arrive indesired

condition


Outcome for Travel




Leave indesired

condition




Arrive indesired

condition


Outcome for Travel




Leave indesired

condition




Arrive indesired

condition


Outcome for Travel




Leave indesired

condition




Arrive indesired

condition


Outcome for Travel




Leave indesired

condition




Arrive indesired

condition


Outcome for Travel




Leave indesired

condition




Arrive indesired

condition


Outcome for Travel




Leave indesired

condition




Arrive indesired

condition


Outcome for Travel


Leave from desired place

● Ideal outcome: leave from anyplace● Airplanes: only from airports● Flying cars:

● Drive to airport, limited in most areas -● VTOL has other limits -● Drive like normal car +


Leave at desired time

● Ideal outcome: anytime, no waiting● Commercial airline: limited departures● Private airplanes: More times but more cost -● Flying car: same are private airplane

● Can't fly in all weather -● Must refuel before leaving -● Option to drive not as flexible as ground car +


Leave with desired objects

● Ideal outcome: take anything● Flying car: capacity is limited

● Size -● Weight -● Must be inside -


Leave in desired condition

● Ideal outcome: any condition● Flying car:

● Must be in good condition to fly -● Can't easily stop mid trip -● Drive same as ground based car


Arrive at desired place

● Ideal outcome: go anywhere● Flying car:

● Go over obstacles +● Limited landing +● Parking might be limited -


Arrive at desired time

● Ideal outcome: arrive instantly● Flying car

● Faster for long trips +● Avoids traffic +


Arrive with desired objects

● Ideal outcome: Everything you want at destination

● Flying car:● Cargo is limited --● Good for perishable items +


Arrive in desired condition

● Ideal outcome: Always arrive in as good or better condition than left

● Flying car:● Faster trip, less tiring +● Any accident is likely deadly --




Leave indesired

condition




Arrive indesired

condition


Flying Car vs. Ground Car




Leave indesired

condition




Arrive indesired

condition


Flying Car vs. Private Plane


Access Enjoyment


Extra Outcomes

Speed

Applications of Extra Outcomes

● Speed● Medical emergency

– Leave from and Arrive at any location required● High value cargo or passenger

● Relative Too Expensive



● Access● Locations not easily available by land

– Over water, valley, wilderness, poor or blocked roads– Surveying and site seeing– Construction

● Security, limit access



● Enjoyment● Fun of flying● Prestige

● Highly subjective● No direct financial value


Outcome Analysis

● Target markets● Calculate ideal price● Increase value and profit margins● Assess market risk● Create business strategy


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Business

Is Your Product Too Expensive?